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TMI Blog1979 (12) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Sambhu Charan Sen, carried on the business of motor spirit and allied materials up to 15th November, 1971. Thereafter, they transferred the business to appellant No. 6, Arun Kumar Sen. Respondent No. 1, the Commercial Tax Officer, Midnapore Charge, by his letter dated 17th November, 1971, transferred the licence of the business in favour of appellant No. 6 with effect from 15th November, 1971. Before the death of the said Sambhu Charan Sen, respondent No. 1 served upon him two notices, both dated 11th July, 1970, for the assessment of sales tax for the sale of motor spirit relating to the returns filed by him for the periods from January, 1968, to December, 1968, and from January, 1969, to December, 1969, under section 7(1) of the Bengal Motor Spirit Sales Taxation Act, 1941, and started two Cases Nos. 24 and 25 of 1970-71. As the said Sambhu Charan Sen died, the assessment could not be made. After his death, respondent No. 1 also served upon the appellants two other notices both dated 12th February, 1972, for the assessment of sales tax for the periods from January, 1970, to December, 1970, and January, 1971, to December, 1971. By these two notices numbered as Cases Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax due from such retail dealer in respect of such month and the amount so determined less the sum, if any, already paid by him shall be paid by the retail dealer into a Government treasury or the Reserve Bank of India within fourteen days from the date of service in the prescribed manner of the notice of demand therefor to be issued by the authority. The proviso to sub-section (1) of section 7 enjoins the giving of a reasonable opportunity to the retail dealer for proving the correctness and completeness of the return before the prescribed authority determines the amount of tax due. Sub-section (2) of section 7 provides that if the amount of the tax due is not paid within the period mentioned in sub-section (1), the authority referred to in clause (b) of section 5 may direct that the retail dealer shall pay in addition to the amount of the tax so unpaid a sum not exceeding that amount by way of penalty. Under subsection (3) of section 7, the amount of tax due or the amount of penalty shall be recoverable from the person from whom it is due as an arrear of land revenue. Section 10 of the Act is as follows: "10. (1) No person carrying on business in motor spirit as a wholesale or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that the said expression rules out any contention in favour of assessment of sales tax after the death of the retail dealer in respect of sales made by him when he was alive. His contention is that so long as the liability of the retail dealer to pay tax is not quantified, there is no question of any tax remaining unpaid. He submits that as the assessment of tax for the periods in question had not been made prior to the transfer, that is, before the death of the retail dealer, the transferees are not liable to be assessed for such periods. On the other hand, it is contended by Mr. Dutt, the learned Advocate appearing for the respondents, that the liability of the dealer to pay sales tax arises as soon as sale of motor spirit takes place. Therefore, it is contended, the tax became due and payable by the retail dealer with the submission of return by him. If the retail dealer has not submitted the correct return, the prescribed authority is entitled to determine the amount due by him and, by virtue of sub-section (4) of section 10, the transferee is liable to pay the tax due. There are three stages in the imposition of tax, namely, the declaration of liability, qualificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealer". It, therefore, comes to this that there is no provision in the Act for the assessment of tax after the death of the retail dealer. Under subsection (4) of section 10, the transferee by devolution of interest is not the retail dealer although he has been made liable to pay the amount of tax payable by the retail dealer, that is, the transferor, which remains unpaid. As has been stated already, the determination of the amount of tax shall not be made by the prescribed authority without giving the retail dealer an opportunity of being heard. The opportunity has to be given to the retail dealer and not to any other person. After the death of the retail dealer, the transferee, namely, his heir, cannot, in our opinion, be substituted in his place by the prescribed authority, for the purpose of complying with the direction contained in the proviso to section 7(1), for the Act does not make any such provision. In the above view of the matter, the contention made on behalf of the appellants that sub-section (4) of section 10 makes the transferee liable to pay the amount of tax that has been determined in the manner provided by section 7(1) of the Act and the proviso thereto, seems t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt as observed by the learned Judge. In State of Punjab v. Jullundur Vegetables Syndicate[1966] 17 S.T.C. 326 (S.C.)., the Supreme Court, in considering the question whether a dissolved partnership firm can be assessed, has observed that it is a settled rule of construction that, in interpreting the fiscal statute, the court cannot proceed to make good the deficiencies, if there be any, in the statute. And it shall interpret the statute as it stands and, in case of doubt, it shall interpret in a manner favourable to the taxpayer. In that case, it was held that, in the absence of a statutory provision permitting the assessment of a dissolved firm, there is no longer any scope for assessing the firm, which ceases to have legal existence. The same view has been expressed in a later decision of the Supreme Court in Additional Tahsildar, Raipur v. Gendalal[1968] 21 S.T.C. 263 (S.C.). With respect to the learned Judge, we are unable to imply the provision of section 7(1) in the provision of subsection (4) of section 10. The word "unpaid" in sub-section (4) of section 10 is significant. So long as the assessment is not made and the amount of tax is determined, it is difficult to say t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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